When Lagging Indicators Catch Up?

 Monetary policy acts with “uncertain lags” and the full effects of the central bank’s aggressive rate hikes have yet to be felt.

 The same is also true of fiscal policy. 

Bloomberg Opinion’s Justin Fox highlights that just before the pandemic, households held about $1 trillion in what was effectively cash, a figure that has ballooned to $4.7 trillion.

At current rates, Americans will still have at least some excess savings until the second half of next year

Federal Reserve’s M2 money supply index

How, then, to account for the resurgent animal spirits recently, which have seen the S&P rally from peak to trough by 17.4% in six weeks? 

John Authers Bloomberg 6 december 2022

https://www.bloomberg.com/opinion/articles/2022-12-06/money-can-t-buy-us-consumers-delay-from-a-recession-forever